MBG Article
Are Curve Balls Being Thrown Into Your Company’s Telecom Invoices as Employees Use More Wireless and Telecom Services?
by Richard Simons
Have you analyzed your telecom bills lately? Comparing your current spending levels with past bills will likely show a disturbing trend line. For the first time in several years, telecommunications costs are rising, perhaps slowly like a curve ball thrown by Roger Clemens, but rising nonetheless.
"How," you ask? Your company, like many others, has worked long and hard to reduce and control telecommunications costs. You have negotiated with carriers, using the competitive environment to achieve the best pricing. You may even be in the small but growing group of forward-thinking companies that have implemented telecom expense control solutions to examine and reduce costs. But still, the bottom line number is creeping up. What is going on?
The Growing Universe of New Telecom Services
The answer can be found in the array of new services produced by telecom-IT convergence. All these new entities are becoming “too much of a good thing.” Beneath the clamor over emerging new technologies, like VoIP and unified messaging, is a gradually growing awareness that the proliferation of new features and services will be accompanied by significant cost increases.
While the base cost of these new converged offerings is a mere fraction of traditional telecommunication costs, previous technology shifts of this kind indicate that increased availability of “hot” new offerings equals increased usage. While it is true that telecom-IT convergence will reduce the cost of basic services, the carriers bringing those services to market are looking to beef up their revenue with new marketing initiatives. They will achieve that goal by introducing plenty of usage-based new features and services that are layered on top of basic service.
Many of these new services provide valuable new capabilities for workers, increasing productivity and strengthening collaboration with co-workers, customers, and partners. Smart companies aren’t unilaterally restricting these services, but seeking to control and account for them as part of overall corporate resource management.
Increasingly, large corporations are working to control the proliferation of devices that employees are plugging in to the corporate network. Corporate users, unlike consumers, are not price sensitive since they expense their business-related use. As cell phones, BlackBerries, and other communications devices multiply and become even more feature-rich, controlling those costs is an imperative.
Of even greater consequence is the fact that many personal digital assistants (PDAs) are becoming part of the corporate network. Most BlackBerries and similar devices now routinely handle corporate e-mail and other potentially sensitive or confidential contents. Companies must now assume complete responsibility for these devices, further adding to IT management complexity.
VoIP Requires More Management
Additionally, managing telecom IT convergence is exposing the technical limitations inherent in the merger of telecom devices into the typical IT infrastructure. VoIP is a perfect example. While less expensive than traditional telephony, it lacks call detail data that identifies who is making and receiving calls, making it difficult to verify charges or make sure the contractual usage rates are being applied properly. It also precludes the ability to charge back costs to various departments.
Wireless Costs Exceed Landline Costs
Adding to the complexity is the fact that in many instances wireless costs far exceed those of landlines, sometimes by a factor of ten. Unless companies clearly understand and communicate such cost differentials, their users cannot make prudent and economical use of the various technologies available to them.
IDC recently reported that 75% of Americans now use cell phones. According to a 2003 survey conducted by the Cellular Telecommunications & Internet Association (CTI), since 1998 the average consumption of minutes by consumers has risen over 250 percent. This led the average bill to increase by 27%. And while landline long distance costs have been driven down to under 3 cents a minute, for cell phones the cost per minute for peak time can range between 8 and 10 cents per minute, assuming a person uses all of their minutes. This also does not include the cost of international calls made via cell phones, which are much more expensive.
The Solution: Tracking and Managing Consumption Through Enhanced Telemanagement
The solution to this dilemma is relatively straightforward, especially for companies with some experience in telecom expense management. Existing telemanagement capabilities for inventory management, call accounting, verification and chargeback can be applied to a new task: consumption management. Companies are beginning to develop the ability to establish and analyze patterns of telecom-IT consumption and then devise strategies for controlling that consumption.
Telecom consumption management starts with creating a comprehensive inventory of assets and a process to manage the distribution and use of those assets over time, including streamlined procurement of equipment and services as needed. Forward-looking companies today have created the ability to “self serve” their procurement needs, and analysts expect that trend to grow rapidly.
At the core of consumption management is the ability to document and analyze actual usage of telecom resources. That process becomes complex as basic telephones are replaced by a variety of “smart devices” with Internet access, e-mail and text instant messaging, and other new services that enhance the ability to share information.
The good news in all of this is that the solution is already in place. Telemanagement provides the means of creating, analyzing, and using data for converged telecom-IT systems. Implementing that control is the secret to achieving the promised results of convergence and knowing how to step up to the plate to hit those tricky curve balls.
Richard Simons is the COO of MBG
